While divorce does not directly impact your credit score, ending a marriage can have a significant impact on your financial well-being. Some find it’s easier to divorce a spouse than a creditor.
That’s because you have a contract with credit card companies and are legally responsible for paying off the accounts in your name, so it’s important to understand your options when separating financially from your spouse.
Who is responsible for marital credit card debt?
You are responsible for any debt accrued under your name, regardless of whether you were the one that created it. Likewise, you and your spouse are both responsible for all debt on joint accounts. North Carolina is an equitable distribution state, meaning a judge will “fairly” divide all assets and liabilities, but that doesn’t mean it will be equal.
A judge can order your spouse to pay all or a portion of credit card debt, but if your name is on the account, you can still be held responsible for any late or missed payments or default, which will negatively impact your credit.
Strategies to protect your financial standing
Experts say divorcing couples should exchange a list of all property and debt, both marital and non-marital, to give them a complete picture of assets and liabilities. Next, consider these steps:
- Work together if possible: Contentious divorces are more expensive, while couples who cooperate spend the least on legal fees.
- Establish your own credit: If you are considering a divorce, apply for a credit card in your name only and open it before closing any existing accounts.
- Close joint accounts: Couples who pay off balances and close joint accounts start their new lives on a better financial footing and remove the possibility for a vindictive spouse to rack up debt in your name.
- Protect existing individual accounts: Removing your spouse from any of your other personal accounts to which they currently have access will protect you from additional debt.
Seek knowledgeable legal advice
Your credit history and score belong only to you. They do not change if you decide to get married or when a divorce occurs. However, your credit can be affected through no fault of your own by an irresponsible ex-spouse. An experienced family law attorney here in North Carolina can help you separate your finances during a divorce and protect your future.